Design

The innovation pipeline: design collaborations between research and development

Authors:
Austin Henderson

There are many great ideas sitting on the shelves of research
laboratories. Frustrated researchers often carry these to other
companies where they become products. Why is it so difficult for
a company to get the innovation that is carried out by its
research labs into the products its sells?

HCI is a special case of this problem. User-centered
innovations, yielding concepts that would be of great value to
users, never make it to product, or they get watered down,
re-engineered, and washed out on the way to becoming unusable
products.

Our point of view at Pitney Bowes is that HCI and research in
general tend to look at the development of products much too
narrowly. Specifically, concepts must meet not only the needs of
users to become products; they must address the needs of the many
other players that participate in turning a concept into a
product.

We believe that development can be more effective if all these
needs are considered concurrently. We have therefore restructured
research at Pitney Bowes (the organization is named Advanced
Concepts & Technology, AC&T) to include a
technology-grounded "Innovation Pipeline." This
pipeline implements a practice of collaborations with the
Business Units (BUs) in conceiving and trialing concepts for
opportunities that stretch the BU’s and customers’ thinking.

I offer this practice as a good way to understand the
relationship between research and HCI. As long as HCI works
alone, it will have little effect on products. The problem, as I
see it, is that considering HCI issues introduces tensions into
the development activity, forcing "trade-offs," which
often lead to question of what value user-studies add to a
product. If HCI participates in product development from the very
beginning, however, and collaborates in the struggles with the
tensions it introduces, it has the chance of profoundly shaping
and directing the product throughout its development and
deployment.

I suggest we broaden the scope of what has to be designed in
making products, and bring HCI to bear as a collaborating
participant in the evolution of solutions to the much tougher
design problems thus created.

The Product Sweet Spot

If a product is to make money for a company, it has to
simultaneously meet (at least) four interacting sets of needs
(See Figure 1).

Technology: It must be technically feasible to build
the product. This may require scientific and engineering
breakthroughs or classical technological innovation (cool
technology).

User value: The product must provide value to the
user. This includes meeting user needs, through a usable human
interface, and also enabling novel or more effective user work
practices when the technology is put into use.

Business Value: The product’s value to the customer
must be something your company can capture and supply at a price
that is less than the effective value to the user, and greater
than your cost in creating it. That is, it must make just plain
good business sense to both your customer and you. This requires
developing a value proposition and a business case.

Strategic value: It must be coherent with company
strategy and be designed to advance that strategy. This may
require restructuring company thinking.

What makes this really difficult is how these four value sets
interact. For example, the need to adjust the cost to make a
product (the classic FAC: fully allocated cost) is affected by
all four of these concerns: cheaper parts and/or a different
architecture (technological feasibility); a simpler user
interface or decreased functionality (user value); increased
functionality (business value); an entry into a new market
(strategic value). Some of these pull one way, some another.

The job for development is to address all these concerns at
once: that is, to get into the sweet spot. As with all design,
this means managing the full collection throughout the
development process and evolving a solution that satisfies
everyone. While isolated pieces of work can be done on particular
issues, none can be considered final until all are taken
togetherthe complete case must be built.

Getting There Effectively

Under this view, the problem of new ideas languishing on
shelves in research labs can be seen as going too far on one of
these dimensions without considering the others. Thusas we
often hear at CHIcool technology that is not usable or
useful to the user is of no value. But similarlysomething
we hear less often at CHIa usable,
technologically-feasible product concept for which no business
case can be made (or which is not strategically aligned with your
company), is of no value, simply because it will never make it to
market through your company. For example, the concept may be for
a market that is too small to matter to your company, or the
margins are not there, or it requires the company to become
expert in something in which it will never be a market
leader.

Companies have research departments so that they can explore
possibilities at lower costs than would be possible with
development divisions or in the marketplace. The goal for
researchers who want to design products for real sale by real
companies is to avoid getting too far away from the sweet spot in
any direction.

Multi-Perspective Teams

Given that we are trying to get into the sweet spot on all
four dimensions, we must arrange that our experiments address all
four dimensions. Pitney Bowes is attempting this by creating
collaborative teams composed of researchers and developers. The
researchers usually include technologists (e.g., physicists,
mathematicians, mechanical and software engineers) and
user-centered innovators (e.g., anthropologists, designers, HCI
specialists). But the team must also include those who can
address the business and strategic value of the ideas (e.g.,
marketing, finance, manufacturing, sales, and operations). These
teams must work to iteratively innovate, develop, and evaluate
concepts against this full spread of needs.

Directions

At the same time, the teams must be careful to ensure that
their evaluations are not premature or off-base. That is, one may
miss the creation of disruptive technology by mis-applying
current values (e.g., copier developers missed the fax machine
because copy quality was so low) [1]. Managing
how to move in this richer design space is a practice we are
developing.

Tensions

Because the expertise in these areas comes from both research
and development, there is a natural tension between innovating
products aligned with the current way of doing business or in
often uncomfortable new directions. Business runs the railroad;
it is naturally interested in innovating for trains that are
faster, better, cheaper. Research looks to make new markets; it
is interested in innovation, in making tracks in a new direction.
In order to stay near the sweet spot, we are finding it valuable
to avoid trying to reduce this tension. In fact, we see it as a
critical resource to addressing all the needs simultaneously. It
helps get everybody moving out of their comfort zones: It keeps
the researchers grounded, and the business folk stretching.

The Innovation Pipeline

As product concepts evolve, the difficulty of asking questions
also grows. That is, we ask the simple questions first and if the
idea still flies, move on to the harder questions. To support and
encourage this, we have structured the work into a two-part
"pipeline." A strategic question starts the work in the
Concept Studio, where concepts are explored broadly around
the question. If no concepts are discovered that appear to be in
the sweet spot, the engagement is terminated. However, if likely
prospects emerge, they are pushed to develop a crude value
proposition and business case. (This can take from two to six
months). The best of these are then passed to the Systems
Laboratory for field trials. Here, the explorations are deep
rather than wide, aimed at refining and proving out all
dimensions of the concept: technological feasibility, user,
business, and strategic value. At the end of this work (six
months to a year), either the attempt fails or a business case
can be made. Because the experimentation in the Systems Lab has
addressed the risky issues, this resulting business case should
be adequate for the partnering business unit to make a solidly
grounded decision on whether and where to enter the concept in
its development mix. As the concept moves through development in
the business unit, research continues to consult, particularly in
areas of significant novelty, to maintain the design in the
identified sweet spot against the pressures of wanting to revert
to the current comfort zone.

Design Cases

AC&T’s experiment with this Innovation Pipeline started in
the summer of 2001. Since then, roughly dozens of strategic
questions have been explored, many concepts with appealing value
propositions have been created and tested, and many opportunities
have entered into development. These include a stamp-like postage
dispenser that uses a novel security model; a system for
protecting against anthrax-contaminated mail at a fraction of the
cost of traditional contamination-proof workspaces; and an
RFID-based practice for document management with
significantly-reduced time for locating lost files.

We are learning firsthand how hard it is to keep everyone
happy. But that is exactly why new-product development is tough.
With our Innovation Pipeline, we believe that we are attending to
the whole problem throughout the innovation process in a coherent
and reasonably efficient way. By integrating the many needs that
must be met to create a technically feasible product that is
valuable to users and will make a good business for our company,
we are sharply increasing Pitney Bowes chances of getting really
useful products into real users hands. Central to this success is
including business considerations in the framing of the HCI
mission: not just innovations based on user needs, but good
businesses built around such user-centered innovation.

Acknowledgements

My thanks go to all my colleagues at AC&T who are working
so hard on this meta-experiment on product research. Specifically
I would like to thank Jim Euchner, Brian Romansky, Cheryl
Picoult-Triska, Gary Hansen, Yuling Wu, Trysh Wahlig and Pat
Sachs with whom I have shared many discussions on all of this,
and who are my partners in running this experiment.

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